2016 -- S 2467

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LC004813

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     STATE OF RHODE ISLAND

IN GENERAL ASSEMBLY

JANUARY SESSION, A.D. 2016

____________

A N   A C T

RELATING TO INSURANCE -- HEALTH INSURANCE -- PRESCRIPTION DRUG

BENEFITS

     

     Introduced By: Senators Walaska, McCaffrey, Ciccone, and Cote

     Date Introduced: February 11, 2016

     Referred To: Senate Health & Human Services

     It is enacted by the General Assembly as follows:

1

     SECTION 1. Chapter 27-18 of the General Laws entitled "Accident and Sickness

2

Insurance Policies" is hereby amended by adding thereto the following section:

3

     27-18-33.2. Pharmacy benefit manager requirements with respect to multi-source

4

generic pricing updates to pharmacies. -- (a) Definitions. As used herein:

5

     (1) "Maximum allowable cost" or "MAC" means the maximum amount that a pharmacy

6

benefits manager will pay toward the cost of a drug;

7

     (2) "Nationally available" means that there is an adequate supply available from regional

8

or national wholesalers and that the product is not obsolete or temporarily unavailable;

9

     (3) "Pharmacy benefit manager" or "PBM" means an entity doing business in this state

10

that contracts to administer or manage prescription drug benefits on behalf of any carrier that

11

provides prescription drug benefits to residents of this state.

12

     (b)(1) Upon each contract execution or renewal, a PBM shall, with respect to contracts

13

between a PBM and a pharmacy or, alternatively, a PBM and a pharmacy's contracting

14

representative or agent such as a pharmacy services administrative organization (PSAO):

15

     (i) Include in such contracts, the sources generally used to determine MAC pricing and a

16

requirement to update pricing information on the MAC list at least every ten (10) calendar days;

17

     (ii) Maintain a procedure to eliminate products from the list of drugs subject to such

18

pricing or modify MAC rates within ten (10) calendar days when such drugs do not meet the

 

1

standards and requirements of this act as set forth in order to remain consistent with pricing

2

changes in the marketplace.

3

     (2) PBM requirements for inclusion of products on a list of drugs subject to MAC

4

pricing. In order to place a particular prescription drug on a MAC list, the PBM must, at a

5

minimum, ensure that:

6

     (i) The product must be listed as "A," "AB," or "B" rated in the most recent version of the

7

United States Food and Drug Administration's approved drug products with therapeutic

8

equivalence evaluations, also known as the Orange Book, or has an "NR" or "NA" rating or

9

similar rating by a nationally recognized reference; and

10

     (ii) The product must be nationally available.

11

     (c) Standards for pharmacy appeals.

12

     (1) All contracts between a PBM, a contracted pharmacy or, alternatively, a PBM and a

13

pharmacy's contracting representative or agent such as a pharmacy services administrative

14

organization (PSAO) shall include a process to appeal investigate, and resolve disputes regarding

15

MAC pricing. The process shall include the following provisions:

16

     (i) The right to appeal shall be limited to fifteen (15) days following the initial claim;

17

     (ii) The appeal shall be investigated and resolved within fifteen (15) days following

18

receipt of the appeal;

19

     (iii) A process by which a network pharmacy may contact the PBM regarding the appeals

20

process;

21

     (iv) If the appeal is denied, the PBM shall provide the reason for the denial and identify

22

the national drug code of a drug product that is available in adequate supply; and

23

     (v) If an appeal is upheld, the PBM shall make an adjustment to the list effective no later

24

than one day after the date of determination.

25

     (d) The department of health shall exercise oversight and enforcement of this section.

26

     SECTION 2. Chapter 27-19 of the General Laws entitled "Nonprofit Hospital Service

27

Corporations" is hereby amended by adding thereto the following section:

28

     27-19-26.1. Pharmacy benefit manager requirements with respect to multi-source

29

generic pricing updates to pharmacies. -- (a) Definitions. As used herein:

30

     (1) "Maximum allowable cost" or "MAC" means the maximum amount that a pharmacy

31

benefits manager will pay toward the cost of a drug;

32

     (2) "Nationally available" means that there is an adequate supply available from regional

33

or national wholesalers and that the product is not obsolete or temporarily unavailable;

34

     (3) "Pharmacy benefit manager" or "PBM" means an entity doing business in this state

 

LC004813 - Page 2 of 8

1

that contracts to administer or manage prescription drug benefits on behalf of any carrier that

2

provides prescription drug benefits to residents of this state.

3

     (b)(1) Upon each contract execution or renewal, a PBM shall, with respect to contracts

4

between a PBM and a pharmacy or, alternatively, a PBM and a pharmacy's contracting

5

representative or agent such as a pharmacy services administrative organization (PSAO):

6

     (i) Include in such contracts, the sources generally used to determine MAC pricing and a

7

requirement to update pricing information on the MAC list at least every ten (10) calendar days;

8

     (ii) Maintain a procedure to eliminate products from the list of drugs subject to such

9

pricing or modify MAC rates within ten (10) calendar days when such drugs do not meet the

10

standards and requirements of this act as set forth in order to remain consistent with pricing

11

changes in the marketplace.

12

     (2) PBM requirements for inclusion of products on a list of drugs subject to MAC

13

pricing. In order to place a particular prescription drug on a MAC list, the PBM must, at a

14

minimum, ensure that:

15

     (i) The product must be listed as "A," "AB," or "B" rated in the most recent version of the

16

United States Food and Drug Administration's approved drug products with therapeutic

17

equivalence evaluations, also known as the Orange Book, or has an "NR" or "NA" rating or

18

similar rating by a nationally recognized reference; and

19

     (ii) The product must be nationally available.

20

     (c) Standards for pharmacy appeals.

21

     (1) All contracts between a PBM, a contracted pharmacy or, alternatively, a PBM and a

22

pharmacy's contracting representative or agent such as a pharmacy services administrative

23

organization (PSAO) shall include a process to appeal, investigate, and resolve disputes regarding

24

MAC pricing. The process shall include the following provisions:

25

     (i) The right to appeal shall be limited to fifteen (15) days following the initial claim;

26

     (ii) The appeal shall be investigated and resolved within fifteen (15) days following

27

receipt of the appeal:

28

     (iii) A process by which a network pharmacy may contact the PBM regarding the appeals

29

process:

30

     (iv) If the appeal is denied, the PBM shall provide the reason for the denial and identify

31

the national drug code of a drug product that is available in adequate supply; and

32

     (v) If an appeal is upheld, the PBM shall make an adjustment to the list effective no later

33

than one day after the date of determination.

34

     (d) The department of health shall exercise oversight and enforcement of this section.

 

LC004813 - Page 3 of 8

1

     SECTION 3. Chapter 27-20 of the General Laws entitled "Nonprofit Medical Service

2

Corporations" is hereby amended by adding thereto the following section:

3

     27-20-23.1. Pharmacy benefit manager requirements with respect to multi-source

4

generic pricing updates to pharmacies. -- (a) Definitions. As used herein:

5

     (1) "Maximum allowable cost" or "MAC' means the maximum amount that a pharmacy

6

benefits manager will pay toward the cost of a drug;

7

     (2) "Nationally available" means that there is an adequate supply available from regional

8

or national wholesalers and that the product is not obsolete or temporarily unavailable;

9

     (3) "Pharmacy benefit manager" or "PBM" means an entity doing business in this state

10

that contracts to administer or manage prescription drug benefits on behalf of any carrier that

11

provides prescription drug benefits to residents of this state.

12

     (b)(1) Upon each contract execution or renewal, a PBM shall, with respect to contracts

13

between a PBM and a pharmacy or, alternatively, a PBM and a pharmacy's contracting

14

representative or agent such as a pharmacy services administrative organization (PSAO):

15

     (i) Include in such contracts, the sources generally used to determine MAC pricing and a

16

requirement to update pricing information on the MAC list at least every ten (10) calendar days;

17

     (ii) Maintain a procedure to eliminate products from the list of drugs subject to such

18

pricing or modify MAC rates within ten (10) calendar days when such drugs do not meet the

19

standards and requirements of this act as set forth in order to remain consistent with pricing

20

changes in the marketplace.

21

     (2) PBM requirements for inclusion of products on a list of drugs subject to MAC

22

pricing. In order to place a particular prescription drug on a MAC list, the PBM must. at a

23

minimum, ensure that:

24

     (i) The product must be listed as "A," "AB," or "B" rated in the most recent version of the

25

United States Food and Drug Administration's approved drug products with therapeutic

26

equivalence evaluations, also known as the Orange Book, or has an "NR" or "NA" rating or

27

similar rating by a nationally recognized reference; and

28

     (ii) The product must be nationally available.

29

     (c) Standards for pharmacy appeals.

30

     (1) All contracts between a PBM, a contracted pharmacy or, alternatively, a PBM and a

31

pharmacy's contracting representative or agent such as a pharmacy services administrative

32

organization (PSAO) shall include a process to appeal, investigate, and resolve disputes regarding

33

MAC pricing. The process shall include the following provisions:

34

     (i) The right to appeal shall be limited to fifteen (15) days following the initial claim;

 

LC004813 - Page 4 of 8

1

     (ii) The appeal shall be investigated and resolved within fifteen (15) days following

2

receipt of the appeal:

3

     (iii) A process by which a network pharmacy may contact the PBM regarding the appeals

4

process;

5

     (iv) If the appeal is denied. the PBM shall provide the reason for the denial and identify

6

the national drug code of a drug product that is available in adequate supply; and

7

     (v) If an appeal is upheld, the PBM shall make an adjustment to the list effective no later

8

than one day after the date of determination.

9

     (d) The department of health shall exercise oversight and enforcement of this section.

10

     SECTION 4. Chapter 27-20.1 of the General Laws entitled "Nonprofit Dental Service

11

Corporations" is hereby amended by adding thereto the following section:

12

     27-20.1-15.1. Pharmacy benefit manager requirements with respect to multi-source

13

generic pricing updates to pharmacies. -- (a) Definitions. As used herein:

14

     (1) "Maximum allowable cost" or "MAC" means the maximum amount that a pharmacy

15

benefits manager will pay toward the cost of a drug;

16

     (2) "Nationally available" means that there is an adequate supply available from regional

17

or national wholesalers and that the product is not obsolete or temporarily unavailable;

18

     (3) "Pharmacy benefit manager" or "PBM" means an entity doing business in this state

19

that contracts to administer or manage prescription drug benefits on behalf of any carrier that

20

provides prescription drug benefits to residents of this state.

21

     (b)(1) Upon each contract execution or renewal, a PBM shall, with respect to contracts

22

between a PBM and a pharmacy or, alternatively, a PBM and a pharmacy's contracting

23

representative or agent such as a pharmacy services administrative organization (PSAO):

24

     (i) Include in such contracts, the sources generally used to determine MAC pricing and a

25

requirement to update pricing information on the MAC list at least every ten (10) calendar days;

26

     (ii) Maintain a procedure to eliminate products from the list of drugs subject to such

27

pricing or modify MAC rates within ten (10) calendar days when such drugs do not meet the

28

standards and requirements of this act as set forth in order to remain consistent with pricing

29

changes in the marketplace.

30

     (2) PBM requirements for inclusion of products on a list of drugs subject to MAC

31

pricing. In order to place a particular prescription drug on a MAC list, the PBM must, at a

32

minimum, ensure that:

33

     (i) The product must be listed as "A," "AB," or "B" rated in the most recent version of the

34

United States Food and Drug Administration's approved drug products with therapeutic

 

LC004813 - Page 5 of 8

1

equivalence evaluations, also known as the Orange Book, or has an "NR" or "NA" rating or

2

similar rating by a nationally recognized reference; and

3

     (ii) The product must be nationally available.

4

     (c) Standards for pharmacy appeals.

5

     (1) All contracts between a PBM, a contracted pharmacy or, alternatively, a PBM and a

6

pharmacy's contracting representative or agent such as a pharmacy services administrative

7

organization (PSAO) shall include a process to appeal, investigate, and resolve disputes regarding

8

MAC pricing. The process shall include the following provisions:

9

     (i) The right to appeal shall be limited to fifteen (15) days following the initial claim;

10

     (ii) The appeal shall be investigated and resolved within fifteen (15) days following

11

receipt of the appeal;

12

     (iii) A process by which a network pharmacy may contact the PBM regarding the appeals

13

process;

14

     (iv) If the appeal is denied, the PBM shall provide the reason for the denial and identify

15

the national drug code of a drug product that is available in adequate supply; and

16

     (v) If an appeal is upheld, the PBM shall make an adjustment to the list effective no later

17

than one day after the date of determination.

18

     (d) The department of health shall exercise oversight and enforcement of this section.

19

     SECTION 5. Chapter 27-41 of the General Laws entitled "Health Maintenance

20

Organizations" is hereby amended by adding thereto the following section:

21

     27-41-38.1. Pharmacy benefit manager requirements with respect to multi-source

22

generic pricing updates to pharmacies. -- (a) Definitions. As used herein:

23

     (1) "Maximum allowable cost" or "MAC" means the maximum amount that a pharmacy

24

benefits manager will pay toward the cost of a drug;

25

     (2) "Nationally available" means that there is an adequate supply available from regional

26

or national wholesalers and that the product is not obsolete or temporarily unavailable;

27

     (3) "Pharmacy benefit manager" or "PBM" means an entity doing business in this state

28

that contracts to administer or manage prescription drug benefits on behalf of any carrier that

29

provides prescription drug benefits to residents of this state.

30

     (b)(1) Upon each contract execution or renewal, a PBM shall, with respect to contracts

31

between a PBM and a pharmacy or, alternatively, a PBM and a pharmacy's contracting

32

representative or agent such as a pharmacy services administrative organization (PSAO):

33

     (i) Include in such contracts. the sources generally used to determine MAC pricing and a

34

requirement to update pricing information on the MAC list at least every ten (10) calendar days;

 

LC004813 - Page 6 of 8

1

     (ii) Maintain a procedure to eliminate products from the list of drugs subject to such

2

pricing or modify MAC rates within ten (10) calendar days when such drugs do not meet the

3

standards and requirements of this act as set forth in order to remain consistent with pricing

4

changes in the marketplace.

5

     (2) PBM requirements for inclusion of products on a list of drugs subject to MAC

6

pricing. In order to place a particular prescription drug on a MAC list, the PBM must, at a

7

minimum, ensure that:

8

     (i) The product must be listed as "A," "AB," or "B" rated in the most recent version of the

9

United States Food and Drug Administration's approved drug products with therapeutic

10

equivalence evaluations, also known as the Orange Book, or has an "NR" or "NA" rating or

11

similar rating by a nationally recognized reference; and

12

     (ii) The product must be nationally available.

13

     (c) Standards for pharmacy appeals.

14

     (1) All contracts between a PBM, a contracted pharmacy or, alternatively, a PBM and a

15

pharmacy's contracting representative or agent such as a pharmacy services administrative

16

organization (PSAO) shall include a process to appeal, investigate, and resolve disputes regarding

17

MAC pricing. The process shall include the following provisions:

18

     (i) The right to appeal shall be limited to fifteen (15) days following the initial claim:

19

     (ii) The appeal shall be investigated and resolved within fifteen (15) days following

20

receipt of the appeal;

21

     (iii) A process by which a network pharmacy may contact the PBM regarding the appeals

22

process;

23

     (iv) If the appeal is denied, the PBM shall provide the reason for the denial and identify

24

the national drug code of a drug product that is available in adequate supply; and

25

     (v) If an appeal is upheld, the PBM shall make an adjustment to the list effective no later

26

than one day after the date of determination.

27

     (d) The department of health shall exercise oversight and enforcement of this section.

28

     SECTION 6. This act shall take effect on September 30, 2016.

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LC004813

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LC004813 - Page 7 of 8

EXPLANATION

BY THE LEGISLATIVE COUNCIL

OF

A N   A C T

RELATING TO INSURANCE -- HEALTH INSURANCE -- PRESCRIPTION DRUG

BENEFITS

***

1

     This act would regulate business relationships among pharmacy services providers, group

2

health insurers, and health service organizations by providing department of health oversight.

3

     This act would take effect on September 30, 2016.

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LC004813

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LC004813 - Page 8 of 8